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If you are paying at least one overdraft fee per month, you are probably feeling rather frustrated. The average bank overdraftfee these days is around $30, so just three overdrafts will cost you $90! And, that is pure profit for your bank. In fact, U.S. banks made about $28 billion last year in overdraft fee-based income alone.
Having to pay overdraft fees seems like it would be purely the domain of the irresponsible banking customer. Not necessarily so! Even people who take constant pains to balance theirchecking accounts can find themselves coming up short.
Common Pitfalls for Bank Customers
Bank customers today face a number of potential pitfalls when as the navigate their banking life. Here are some of the main pitfalls that bank customers face that can result in more overdraft fees:
1. Overdraft protection programs:
Most people do not realize that they are enrolled in an overdraft protection program. That's because most banks automatically enroll people in these programs when they sign up for a new checking account. Put simply: participating in these programs enables the bank to cover any charges that exceed the balance of the account. But, the customer must pay a hefty overdraft fee - often multiple fees in the same day - every time this happens.
2. Debit cards:
In terms of the history of modern banking, debit cards are a relatively recent phenomenon. And, they are a great convenience. However, when combined with overdraft protection programs, they can also be quite costly. Reason: your bank will not reject a pending debit charge if your balance is too low. Rather, it will honor the charge, and then automatically charge you an overdraft fee. This fact makes overdraft protection programs anddebit cards a deadly combination.
3. Confusing online bank statements:
Even for those who try diligently to track their balances online in order to avoid overdrafts, it is not so easy. That is because the way the major banks display your account information, including current balance amount, can be very misleading. For example, a check that already shows as having cleared your account may have not yet been deducted from your balance. This can give the false impression that the balance is larger than it actually is - increasing the risk of overdrawing the account.
4. Transaction stacking practiced by banks:
Most big banks have admitted to participating in something called "transaction stacking." This is where they deliberately process the transactions of higher amounts first, then the lower ones - regardless of the order they were made on a given day. This practice increases the chances that you will end up with a negative account balance after a day of shopping.
Reversing Overdraft Fees
You may have recently noticed an overdraft fee on your account. If you are interested in reversing overdraft fees, here is what you need to do:
1. Take the time to get the facts straight about what happened, including the transaction date, amount and vendor name for the charge that caused the overdraft.
2. Be polite to the bank rep: he or she is just a person like you working for a large bank. They will be much more likely to agree to reverse your charge if you are polite.
3. If you don't succeed in getting the fee reversed on the phone, try writing a letter and sending it to the headquarters office. Sometimes, putting everything in writing will show the bank you are sincere in your desire to get the charge reversed.
Whether or not you are successful at reversing your overdraft charges, just the time it takes you to lodge a complaint is costing you money. In the end, the best solution for you may be to switch to a bank that does not charge overdraft fees - even when you overdraw your account.
